MYTH No. 1: Right-wing, free market fundamentalists in the House said that passing the bill was tantamount to instituting socialism.

REALITY: It is more accurate to describe the bailout as lemon socialism. The privatization of profits and the socialization of losses. Central American oligarchs used to oppose highways and sewer systems because any sort of public expenditure would lead to socialism.

McCain MYTH: The GOP Presidential nominee in a NPR interview repeatedly said that the US is in the midst of a fiscal crisis. And, this is not a senior moment.

REALITY: The crisis facing the American economy is a financial crisis. Contrary to the Arizona Senator, the root of the problem is not "earmarks or excessive governmental spending." The solution is not a spending freeze/

RACIST, RIGHT-WING MYTH: The housing crisis was caused by Democrats who required banks to give loans to blacks, Hispanics, and poor people.

REALITY: The Community Reinvestment Act was passed in 1977. There a name for this kind of logical error. Students look it up. The problem that we are now facing is a housing bubble. Middle-income, the affluent, and the wealthy benefited as much or more than anyone from the rise in housing prices.

ECONOMIC CRANK INNUMERATE MYTH: Every period of severe economic crisis throws up the wildest sorts of economic crankery In the 1930s there was the "social credit" of Major Douglass. Technocracy, and the Townsend Plan. Jon Maynard Keynes actually had some rather nice things to say about these cranks.

There's a "plan" going around I've seen it in an mail from an East Coast rabbi, heard it on a semi-racist radio show, and the like. A caller to a NPR program brought it up and none of the experts caught the mathematical error.

Here's the "plan" attributed to T. J. Birkenmeier:

I'm against the $85,000,000,000.00 bailout of AIG. Instead, I'm in favor of giving $85,000,000,000 to America in a We Deserve It Dividend. To make the math simple, let's assume there are 200,000,000 bonafide U.S. Citizens 18+. Our population is about 301,000,000 +/- counting every man, woman and child. So 200,000,000 might be a fair stab at adults 18 and up.. So divide 200 million adults 18+ into $85 billion that equals $425,000.00. My plan is to give $425,000 to every person 18+ as a We Deserve It Dividend.

The only problem is that the Birkenheimer plan is too good to be true. By a factor of 1000. If you divide 85 billion (8.5e10) dollars by 200 million (2e8) adults, you get $425 per adult, not $425,000 per adult.

HOOVER REDUX MYTH: We would be better off letting the market alone. The invisible hand will sort everything out.

REALITY: This was tried back in Hoover's era. He was the first to judge the "fundamental are strong." As John Maynard Keynes observed, "in the long run, we are all dead." The market may take exceedingly long to reach an equilibrium if let to it own devices And, it is just possible, that things, housing prices, might fall below the equilibrium. One of the essential points that Keynes made is that the economy often adjusts by chaing levels of output rather than by changes in prices.